By Eric Hill | Rose Law Group Reporter
The used car market is finally cooling after 18 months of record high prices. Recently, a key market indicator definitively confirmed that wholesale used vehicle prices are descending from their all-time highs. This indicator is called the Manheim Market Report or MMR.
The MMR is published by Manheim, which is the largest wholesale auto auction in the US. Most used car inventory at dealerships in the US is sourced from auctions like Manheim, so MMR values are a particularly useful metric for understanding market trends.
Last month, MMR values dropped 3% from August to September – an especially steep one month drop. This drop also brought the index below its September 2021 value, which is the first time that wholesale car prices have fallen year over year since May of 2020. Even better, Manheim reports that the downward trend has continued through the first half of October.
So, what does this mean for buyers? Well, not much – yet. Remember, the MMR is a wholesale index, so it will take some time for retail prices to catch up. And unfortunately, because a significant share of the inventory on lots today was acquired before wholesale prices began falling, dealers have a strong incentive to keep prices high enough to recover their costs on those vehicles.
Nonetheless, dealers can’t continue to hold inventory without incurring additional costs, so pressure is mounting to sell. As such, buyers that can hold out a little bit longer will finally be rewarded with lower prices.
